Things to Avoid While Buying a New Home

Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the lender approves their loan. There are still a few major hurdles to jump before closing. Here are some things to avoid during the home buying process to assure your transaction goes smoothly.

Don't empty your wallet on big-ticket items Although you may be dreaming of ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to keep away from vacations and vehicle purchases until your loan closes. Financing your stainless steel appliances with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. It's even a red flag to make those big-ticket purchases using cash. Lending Institutions are examining your cash on hand when considering your loan.

Don't get a new career. Lenders like to see a consistent work history on your application. Getting a new job may not compromise your ability to qualify for a loan - particularly if you are getting a bigger paycheck. However, switching jobs during your loan process may influence whether or not you are approved.

Don't change banks or move money around in your bank accounts. Most lenders will require you to provide recent bank statements for accounts in your name: checking, savings, money market, and other assets. The lender looks for a consistent rise and fall of your money each month, in the interest of ruling out fraud. Even for practical purposes, transferring funds or changing banks could make it more difficult for your lending institution to verify your account history.

Don't give cash directly to your seller (usually in cases of "for sale by owner") for earnest money. Your good faith money does not belong to the seller: it remains yours until closing. Your earnest funds are to be used for your expenses upon closing; some sellers might not understand this. It's wise to put the funds into a trust account, or get a neutral party, like a lawyer to hold them until the deal closes. The contract should document to whom the money goes if the transaction fails.

At Amity Mortgage LLC, we answer questions about this process every day. Give us a call: 2037296681.